The restrictive monetary policies of the Barbados Central Bank have been impacting on competition in the country's commercial banking sector, according to the professional services firm PricewaterhouseCoopers.
In its performance highlights report on the Barbados banking industry for the year 2004, PwC noted that competition in the mortgage market continued aggressively throughout the year amid a low interest rate environment.
"It means that aggressive competition for loan business may have resulted in an emphasis on low pricing at the expense of credit quality and, coupled with the impact of restrictive monetary policy, this can have a significant negative effect on loan loss provisions," observed the firm.
"This will impact not only on individual consumer loans but on larger commercial loans as well," it added.
As a result, PwC surmised that the Barbados banking market was approaching saturation point and noted a "closing window of opportunity" for new entrants to the market offering existing products.
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